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BUSINESS Thursday 4 May 2017
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Tesla 1Q loss widens on higher spending ahead of Model 3

DEE-ANN DURBIN of 78 cents a year ago. ered more vehicles in the on sale later this year. Tesla charging stations to meet
AP Auto Writer Excluding one-time items, quarter. Tesla said it re- said it is preparing its fac- anticipated demand. Tesla
DETROIT (AP) — Electric car Tesla reported a loss of mains on track to start pro- tory in Fremont, California, said it plans to open 100
maker Tesla’s first-quarter $1.33 per share, which was duction of the Model 3 in to produce 5,000 Model 3 retail and service loca-
loss widened 17 percent to bigger than Wall Street ex- July. The company’s desire sedans per week sometime tions worldwide this year,
$330 million as it ramped pected. Analysts polled by to move beyond its current before the end of 2017 and including its first stores in
up spending ahead of the FactSet forecast a loss of position as a niche maker 10,000 per week at some Dubai and South Korea.
launch of its Model 3 sedan $1.23 per share. of luxury cars largely rests point in 2018. It also plans to double the
and its solar panel business. Revenue more than dou- on the Model 3. The lower- Palo Alto, California-based number of fast-charging
The loss equaled $2.04 per bled to $2.7 billion from cost model, which will start Tesla is also expanding Supercharger stations to
share, compared to a loss $1.15 billion as Tesla deliv- around $35,000, is set to go its network of stores and 10,000.q

Fed leaves rates unchanged but signals further hikes ahead

M. CRUTSINGER The Fed is in the midst of
AP Economics Writer a campaign to gradually
WASHINGTON (AP) — The raise interest rates from
Federal Reserve has left its ultra-lows. One reason for
benchmark interest rate it to stand pat this week is
at a still-low level near 1 that even though the job
percent while signaling market has shown steady
that it expects a resilient strength, the economy it-
U.S. economy and solid self is still growing in fits and
job market to justify higher starts. On Friday, the gov-
rates later this year. ernment estimated that
A statement the Fed issued the economy, as gauged
Wednesday after its lat- by the gross domestic
est policy meeting noted product, grew at a tepid
that the economy slowed 0.7 percent annual rate last
sharply during the January- quarter. It was the poorest
March quarter but that it quarterly performance in
expects that slump to be three years.
“transitory.” Though some temporary
The Fed’s pause in raising factors probably held back
rates comes after it mod- growth last quarter and
estly lifted its benchmark might have overstated the
short-term rate in Decem- weakness, the poor show-
ber and March. Most econ- A television screen on the floor of the New York Stock Exchange shows the rate decision of the ing underscored that key
omists expect it to do so Federal Reserve, Wednesday, May 3, 2017. The Federal Reserve is leaving interest rates un- pockets of the economy
again when it next meets in changed, while signaling that it expects a resilient U.S. economy and solid job market to justify remain sluggish.
further rate hikes later this year.
mid-June. (AP Photo/Richard Drew) On Monday, the govern-
Analysts noted that the ment said consumer spend-
Fed’s statement Wednes- Economics. Even after the Fed’s recent Nearly eight years after the ing stalled in March for a
day contained no surprises Stock prices and bond increases, rates through- recession ended, the un- second straight month.
and did not alter their view yields edged slightly higher out the economy remain employment rate is a low And the Institute for Supply
that the central bank is on after the Fed announced low by historical standards 4.5 percent. Key gauges of Management reported a
track for two more rate its decision at 2 p.m. East- and are widely thought to the economy — from home drop in factory activity.
hikes this year. ern time. The moves might have helped support the sales to consumer confi- Most economists have ex-
“We still think that the Fed have reflected the Fed’s economy throughout the dence to the stock market pressed optimism that the
will hike again in June, al- dual message that while recovery from the Great — appear robust. economy is strengthening
though that assumes em- now isn’t the time to resume Recession. Low rates have Still, consumer spending in the current April-June
ployment and growth re- raising rates, the economy made loans relatively in- and factory output have quarter, fueled by job
bounds in April and May,” remains durable enough expensive, for example, slowed, and inflation re- growth, higher consumer
said Paul Ashworth, chief to withstand further hikes for businesses and for home mains below the Fed’s tar- confidence and stock-mar-
U.S. economist at Capital soon. and auto buyers. get rate. ket records. q
Taco Bell sales jump; plans more fried chicken ‘innovation’

LOUISVILLE, Ky. (AP) — Naked Chicken Chalupa. rolled out fried chicken pectations. Domino’s, by contrast, has
Taco Bell says a concoc- The results come as other pieces shaped like tortilla But results were disap- enjoyed six years of quar-
tion made with a deep- restaurant chains have chips served with a nacho pointing at the company’s terly sales growth in the
fried chicken “taco shell” struggled to increase cus- cheese dipping sauce. struggling domestic Pizza U.S., including a 10 percent
helped lure customers into tomer traffic in stores. Mc- “Let’s not kid ourselves, Hut business, which saw jump in the latest quarter.
its stores, and noted that Donald’s and Starbucks you’ll see more Naked sales decline 7 percent at To spark a turnaround,
it’s planning more “Naked” earlier reported sales in- products — we’d be crazy established locations. Yum said it recently struck
chicken menu items. creases in the U.S., for in- not to,” said Greg Creed, The pizza chain has suf- an agreement with Pizza
The chain’s sales jumped stance, but said they were CEO of Taco Bell parent fered in part because of Hut franchisees in the U.S.
8 percent at established the result of higher pricing. company Yum Brands. its history as a chain of sit- intended to better align
locations in the first three Already, Taco Bell is look- Taco Bell’s sales perfor- down restaurants, at a time the business on marketing
months of the year, which it ing to build on the Na- mance helped Yum report when people increasingly efforts and give the chain
credited in part to $1 menu ked Chicken Chalupa’s a profit for the first quarter look for speed and conve- a “digital, delivery-centric
items and its limited-time success, and this week that beat Wall Street ex- nience. focus.”q